It would appear that the following warning from Jack Welch appears to not have been heeded: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near”.
In the case of the retail sector, it is the rapid rise of online spending that is disrupting retailers’ business models. Compare how online sales were equal to 1% of retail sales in 2009 and close to 16% in 2019. Capgemini’s own research on the last-mile delivery challenge found that 76% of UK consumers order groceries online as it allows them to choose products at their own leisure. It is not that organisations are failing to identify the change in their customers behaviour, but are possibly failing to deliver a continuously evolving transformation which causes the rate of change on the outside to exceed the rate of change on the inside.
Our other research on why companies are struggling with their digital transformations shows that organisations believe they are less equipped with the necessary leadership capabilities than they were in 2012 (45% in 2012 compared to 35% in 2018). The implication of this research touches many different areas, but how does leadership capability affect the rate of change, and their ability to deliver an evolving transformation?
Increasing leadership capability
Some leaders are not aware of the benefits of being flexible in their transformation management delivery, and are adopting the delivery method they are most familiar with. A non-specific delivery method can mean that if an organisation requires a sudden change in strategic direction, ongoing transformations may have a loss of focus and value. Examples of this are the Ford Edsel failing to reach market quickly enough, and McDonald’s being unable to adapt to feedback when their Arch Deluxe marketing campaign was not well received. A possible way to prevent similar failures again, is to increase leadership capability around transformation delivery. Equipped with the knowledge on how to select an appropriate delivery method, organisations can deliver their customers’ needs faster.
shows how we can think about selecting an appropriate delivery method and help ensure organisations in any sector avoid the difficulties the retail sector has experienced. The ability to analyse and apply (highlighted in the box) is perhaps the leadership capability that some organisations believe can be more developed. If requirements are stable, well-documented, and well-defined, and the technology is understood and mature, then given the right training, leaders can analyse this and understand that there’s no additional value gained from using an Agile delivery approach. Alternatively, if requirements are prone to change and the technology is new, using Agile might be a more appropriate response.
By providing more training and adopting a flexible delivery approach, organisations can then apply the appropriate methodology for multi-speed transformations. Multi-speed transformations allows organisations to deliver fast or slow to match their needs and the needs of the market. If your organisation’s leaders can identify the correct delivery methodology, whether that be Agile, Waterfall or a hybrid of the two, you can reach the market at the right time, and align transformations to be closer to your strategic priorities.
If organisations want to learn from the retail sector and ensure that rate of change on the inside keeps pace with the rate of change on the outside, they need to increase leadership capability specifically to analyse and apply transformation management delivery. This will enable a better focus to shape transformations to customers’ needs, increase speed to market, and take more calculated risks.
As a consultant for Capgemini Invent, Jason’s experience in military law enforcement and telecommunications has uniquely developed his analytical thinking and communication skills to solve problems and deal with ambiguity. He is passionate about helping clients overcome the many obstacles they face with their digital transformations.